The government has officially launched a new R20-billion loan scheme to support small businesses in distress due to the ongoing Covid-19 pandemic, July social unrest and recent devastating floods.
The scheme intended to disburse loans worth up to R200-billion to small businesses at favourable interest rates and repayment terms . Banks would not be taking much lending risk because any loans disbursed under the scheme would be guaranteed by the Reserve Bank and the Treasury, meaning if businesses fail to pay back the loans, the fiscus would be on the hook and honour any shortfall.
By the time the government and banks negotiated the terms of the scheme and launched it, South Africa was already six weeks into lockdown. And by that time, banks had already forged ahead with offering their customers debt relief measures worth R33-billion, such as payment holidays and debt relief, reducing the demand for loans under the original loan guarantee scheme.
Second, a R5-billion business equity-linked guarantee scheme will be introduced this year. The terms of this aspect of the scheme are still being concluded. Effectively, it will allow finance providers to offer business owners loans that can be converted into equity if the borrower defaults on loan repayments.
which small business turns over this requirement of turnover
bullshit deal